Microsoft Adding “a la carte” Cable Channels to Xbox?

The maker of the Windows operating system has proposed a range of possibilities in these early talks including creating a “virtual cable operator” delivered over the Internet for which users pay a monthly fee.

Other options include using the Xbox to authenticate existing cable subscribers to watch shows with enhanced interactivity similar to how pay TV operators have sought to do over the Web, said these people.

Microsoft is also exploring the possibility of creating content silos and selling more individual channels directly such as an HBO or Showtime. It already has Walt Disney Co’s (DIS.N) ESPN on the XBox Live online service for example.

These people said a service may not arrive for another 12 months, but early discussions have been productive.

It sounds like they really don’t have an idea how this would shake out, other than they want to get in on the television game, so to speak. What Microsoft should be doing is concentrating on cutting out the cable providers and offering channels a la carte, basically becoming a cable provider themselves through the Xbox console. They have a real opportunity here to dictate the future of a “cable-less” world and create new business for themselves. They have a young, male-centric, and loyal user base with the Xbox.

For one reason or another though, I don’t have confidence in Microsoft to pull something unique off. [via Geek Tyrant]